Chinese rivals to fight it out for Rover

THE fate of MG Rover hangs in the balance this week after one of three potential bidders walked away, leaving the way clear for two Chinese carmakers.

Corporate troubleshooter David James, who ran the Millennium Dome for the Government, said last night his Kimber bid vehicle had failed to reach agreement with Shanghai Automotive Industry Corporation over a joint £120 million bid.

He said: "The deal is off and it is a tragedy for Longbridge and everyone associated with it, and it is another nail in the coffin of British manufacturing."

SAIC is still in talks with former Ford Europe boss Martin Leach, who flew back from Shanghai at the weekend. His plans are said to involve resumption of volume car production at Longbridge.

Leach expects SAIC president Chen Hong to arrive in London for talks towards the end of this week. But administrator PricewaterhouseCoopers favours a deal reportedly worth up to £50 million from Nanjing Automobile Corporation. It is expected to shift much of the production to China, with Longbridge becoming a research and development centre only making sports and upmarket models.

Tony Woodley, general secretary of the Transport and General Workers' Union, is expected to call on Chancellor Gordon Brown to offer assistance to a deal at the union's annual conference in Blackpool. "We could end up with a mini-miracle for jobs or we could end up with next to nothing," he said.